The Chinese regulator has still not published the list of new video game titles approved since the end of July 2021. It is now the longest suspension of this nature. The previous suspension, which took place in 2018, lasted 9 months.
Consequence: around 14,000 small studios and companies related to video games in China (merchandising, advertising and publishing) have gone out of business in recent months, says the South China Morning Post.
Video game publishers in China who intend to resist this freeze find the only solution to develop their activity abroad. This is the case with Tencent Holdings and NetEase.
Direction Singapore
Shenzhen-based Tencent plans to open a new video game development studio in Singapore, under the leadership of its subsidiary TiMi Studio Group.
But this strategy is not within everyone’s reach. Big companies like ByteDance, owner of TikTok, online search giant Baidu and Tanwan Games have also cut their losses by laying off a number of employees.
The regulatory uncertainty in this sector in China is all the more problematic given that the Chinese video game market is the largest and the most lucrative in the world.
No official explanation
The Chinese regulator has not provided an official explanation following this freeze. Since May 2019, he had gotten into the habit of announcing new authorizations either in the middle or at the end of each month. Between 80 and 100 new games were typically approved each month.
The freeze on new licenses comes months after President Xi Jinping raised the issue of gambling addiction among young Chinese people. A major measure in this area was also announced in August 2021: the restriction of three hours of play per week for minors.
In detail, gaming platforms can now only offer online games to minors from 8 p.m. to 9 p.m. on Fridays, weekends and public holidays.